China’s Tencent sees boost from gaming, AI demand despite revenue miss
Chinese tech giant Tencent It reported Wednesday that revenue rose 9% on earnings in the first quarter of 2026, but missed analyst expectations.
Compared to the forecast data of LSEG analysts, Tencent’s earnings in the first quarter of 2026 are as follows:
- Revenue: 196.5 billion Chinese yuan ($28.9 billion), compared to estimates of 199 billion Chinese yuan.
- Domestic gaming revenues: 45.4 billion Chinese yuan, up 6% year-on-year, but a slowdown compared to the 24% increase the segment saw in the first quarter of 2025.
“We started 2026 by making significant progress in our new AI products and continuing to use AI to grow our existing core businesses,” Ma Huateng, Tencent’s chairman and CEO, said in a statement. he said.
“Our core businesses continued to increase their engagement, revenue and profits by driving cash flow
“In addition to financing our AI investments, we will also fund use cases for future AI deployment,” he added.
back to AI
Tencent’s fintech and other business services segment brought in 60 billion Chinese yuan in the first three months of the year, up from 55 billion Chinese yuan in the same period last year.
The company said its Business Services revenues rose 20% year-on-year, driven by growth driven by rising cloud services revenues supported by rising demand in domestic and international markets, including demand for Artificial Intelligence-related services. He added that AI broker WorkBuddy is the most popular brokerage service in China.
Ivan Su, Morningstar’s senior equity analyst, told CNBC that the firm’s artificial intelligence investments are already yielding returns.
“The upgraded artificial intelligence-driven advertising recommendation model enabled the increase in advertising revenue to increase to 20%,” he said. “AI expenditures are tracked in accordance with previously directed full-year figures management.”
However, Su marked the slowdown in gaming revenue growth as a negative, stating that the slowdown was mostly due to “the timing change of Chinese New Year affecting revenue recognition rather than any underlying demand issue.”
